Hawaii offers a vibrant environment for business, with over 144,000 small businesses employing nearly 50% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Hawaii is crucial. This guide provides a comprehensive overview of the various taxes small businesses in Hawaii must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Hawaii
Business owners in Hawaii may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Corporate Income Tax
Pass-Through Entity (PTE) Tax
Applicable Entities: S corporations, partnerships, and LLCs treated as partnerships at the federal level
Tax Rate: 9%
Filing Requirements: File Form N-362E by the 20th day of the fourth month following the close of the tax year.
Estimated Payments: Payments are due quarterly on the 20th day of the fourth, sixth, and ninth months of the current tax year and the 20th day of the first month following the close of the tax year.
General Excise Tax (GET)
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: Varies
Filing Requirements: File quarterly returns (Form HW-14) by the 15th day of the month following the period.
Estimated Payments: Payments due quarterly, monthly, or semi-weekly based on withholding amounts.
Unemployment Insurance Tax
Nonresident Withholding Tax
Applicable Entities: Pass-through entities with nonresident members
Tax Rate: 11% on distributive share income
Filing Requirements: File Form N-4 with Form N-35 (S corporations) or Form N200-V or Form N201-V with Form N-20 (partnerships) by the 20th day of the fourth month following the close of the tax year.
How to File and Pay Hawaii Business Taxes
Business taxes in Hawaii can be filed and paid through various methods:
Online Filing and Payment: Use Hawaii Tax Online for electronic submissions and payments.
Mail: Send forms and payments to the address on the form (where allowed).
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Income Tax Returns: Due by the 20th day of the fourth month after the tax year ends
Estimated Tax Payments: Due quarterly by April 20, June 20, September 20, and January 20.
General Excise Tax Returns: Monthly, quarterly, or semiannual filing based on liability
Withholding Tax Returns: Due quarterly by the 15th day of the month following the period
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31
AMT Returns: Due by the 20th day of the fourth month after the tax year ends.
Tax Credits and Incentives
Hawaii offers several tax credits and incentives for small businesses, including:
Enterprise Zone (EZ) Program: Businesses located in an EZ location, with at least half of their annual gross income from certain activities, qualify for:
A 100% exemption from the GET for up to seven years
An 80% income tax credit for the first year
An additional income tax credit equal to 80% of annual unemployment insurance premiums. This goes down by 10% each year for six additional years, ending at 20%.
Renewable Energy Technologies Income Tax Credit: Eligible individuals and corporations can claim an income tax credit for up to 35% of the total cost for a solar photovoltaic (PV), solar space heating, or solar thermal water heating systems (subject to caps) and up to 20% of the cost for wind-powered energy systems.
Hawaii Tax Credit for Research Activities: Eligible small high-technology businesses that conduct more than 50% of their activities in qualified research can claim a refundable credit against their corporate or personal income tax for expenses incurred in research activities.
Check out our article on tax incentives for Hawaii businesses for more information.
Hawaii’s business tax breakdown by business type
Business taxes can get complicated, so below, we’ve included a chart that breaks down the taxes different business structures usually pay.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | Pass-through election tax | Corporate income tax | General excise tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the PTE tax election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Hawaii small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
Hawaii Small Business Taxes: The Employer’s 2024 Guide
Hawaii offers a vibrant environment for business, with over 141,000 small businesses employing nearly 50% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Hawaii is crucial. This guide provides a comprehensive overview of the various taxes small businesses in Hawaii must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Hawaii
Business owners in Hawaii may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Corporate Income Tax
Pass-Through Entity (PTE) Tax
Applicable Entities: S corporations, partnerships, and LLCs treated as partnerships at the federal level
Tax Rate: 9%
Filing Requirements: File Form N-362E by the 20th day of the fourth month following the close of the tax year.
Estimated Payments: Payments are due quarterly on the 20th day of the fourth, sixth, and ninth months of the current tax year and the 20th day of the first month following the close of the tax year.
General Excise Tax (GET)
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: Varies
Filing Requirements: File quarterly returns (Form HW-14) by the 15th day of the month following the period.
Estimated Payments: Payments due quarterly, monthly, or semi-weekly based on withholding amounts.
Unemployment Insurance Tax
Nonresident Withholding Tax
Applicable Entities: Pass-through entities with nonresident members
Tax Rate: 11% on distributive share income
Filing Requirements: File Form N-4 with Form N-35 (S corporations) or Form N200-V or Form N201-V with Form N-20 (partnerships) by the 20th day of the fourth month following the close of the tax year.
How to File and Pay Hawaii Business Taxes
Business taxes in Hawaii can be filed and paid through various methods:
Online Filing and Payment: Use Hawaii Tax Online for electronic submissions and payments.
Mail: Send forms and payments to the address on the form (where allowed).
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Income Tax Returns: Due by the 20th day of the fourth month after the tax year ends
Estimated Tax Payments: Due quarterly by April 20, June 20, September 20, and January 20.
General Excise Tax Returns: Monthly, quarterly, or semiannual filing based on liability
Withholding Tax Returns: Due quarterly by the 15th day of the month following the period
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31
AMT Returns: Due by the 15th day of the fourth month after the tax year ends.
Tax Credits and Incentives
Hawaii offers several tax credits and incentives for small businesses, including:
Enterprise Zone (EZ) Program: Businesses located in an EZ location, with at least half of their annual gross income from certain activities, qualify for:
A 100% exemption from the GET for up to seven years
An 80% income tax credit for the first year
An additional income tax credit equal to 80% of annual unemployment insurance premiums. This goes down by 10% each year for six additional years, ending at 20%.
Renewable Energy Technologies Income Tax Credit: Eligible individuals and corporations can claim an income tax credit for up to 35% of the total cost for a solar photovoltaic (PV), solar space heating, or solar thermal water heating systems (subject to caps) and up to 20% of the cost for wind-powered energy systems.
Hawaii Tax Credit for Research Activities: Eligible small high-technology businesses that conduct more than 50% of their activities in qualified research can claim a refundable credit against their corporate or personal income tax for expenses incurred in research activities.
Check out our article on tax incentives for Hawaii businesses for more information.
Hawaii’s business tax breakdown by business type
Business taxes can get complicated, so below, we’ve included a chart that breaks down the taxes different business structures usually pay.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | Pass-through election tax | Corporate income tax | General excise tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the PTE tax election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Hawaii’s small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
